Free trade agreement summit

Feb. 28, 2005

Supporters make case for DR-CAFTA

By Devin Steele

CHARLOTTE  Bringing their message to textile country this month, U.S. trade officials and allies stepped up efforts to win support for a controversial free trade agreement with Central America and the Dominican Republic.

Former U.S. Congressman Cass Ballenger (R-NC), past chairman of the Subcommittee for the Western Hemisphere and the Committee on International Relations, presents a few introductory remarks during the DR-CAFTA summit in Charlotte.
Photos by Devin Steele

North Carolina summits, led by the U.S. Trade Representatives office and the U.S. Chamber of Commerce, took place here on Feb. 17 and in Raleigh the following day. They were aimed at extolling the benefits of the DR-CAFTA deal in the face of the continued growing threat from China. Possible effects of the agreement on the states beleaguered textile industry dominated discussions, attended by a number of textile manufacturers and suppliers.

Central American ambassadors spoke during the events, which were part of a nationwide tour aimed at promoting the trade deal. Earlier stops included Dallas, New York City, Los Angeles and New Orleans.

Several trade representatives, Chamber officials and CAFTA supporters from industry also spoke. Among them: Keith Crisco, president of Asheboro Elastics, an Asheboro, NC-based producer of knitted narrow elastic fabrics for the apparel, home furnishing, medical and industrial markets.

A vote against CAFTA is a vote for China, said Crisco, whose company manufactures domestically and operates 11 distribution facilities in Mexico and the Caribbean.

Many textile industry representatives have been reluctant to sign off on DR-CAFTA, however, because it contains several rule-of-origin loopholes that provide benefits to non-signatory countries. Those provisions  specifically trade preference levels (TPLs) and cumulation that allow for some third-party goods to have duty-free access to the U.S. market  would lead to further job erosion in the domestic textile industry, opponents contend.

The basic problem we have is still unanswered  how do we mitigate those things that are detrimental to the agreement? asked Steve Dobbins, president and CEO of Carolina Mills, Maiden, NC, who attended the Charlotte summit. And all those revolve around allowing benefits to third parties. In allowing that, we put at risk some textile jobs.

Several speakers during the summit framed their argument in the context of China and the removal of worldwide trading quotas, which expired on December 31.

If we dont pass this agreement, the competitive threat from China means that apparel customers in Central America will pack up and move to China and take their order books with them, said Christopher Padilla, assistant U.S. Trade Representative for Intergovernmental Affairs and Public Liaison.

Keith Crisco, president of North Carolina-based Asheboro Elastics, expresses his support for the trade agreement.

But critics of the pact claim they want a DR-CAFTA, which they say would improve their business prospects  just not this DR-CAFTA.

Giving a pint of blood today wouldnt be difficult if you hadnt given three gallons yesterday, Dobbins said.

A renegotiation of the deal at this point is a fantasy, said David Spooner, special textile negotiator in the Office of the U.S. Trade Representative. Essentially, more than 90 percent of yarn and textile makers requests were granted in the DR-CAFTA deal, he added.

They requested a yarn-forward rule of origin, which they got, he said. There are some exceptions to that basic rule. The exceptions amount to 10 percent or 7 percent of trade, depending on how you estimate it. Nevertheless, our industry received 90 percent or more of what they requested in negotiations.

Congressional hearings on the deal are expected to begin in March, Padilla said.

Economic impact study

In conjunction with the summits, the U.S. Chamber released an economic impact study outlining the benefits of DR-CAFTA for North Carolinas industries and local economies.

The study, the group reported, revealed that the state would see an increase of $730 million in output and 5,375 new jobs after just one year of implementation of the agreement. Those numbers would swell to nearly $4 billion in output and 28,000 new jobs within nine years of implementation, according to the report.

The five Central American countries and the Dominican Republic together already represent North Carolinas second largest export market, accounting for more than $1.7 billion in exports in 2003, the group said.

Besides the potential loss of U.S. jobs, other concerns over DR-CAFTA include lax labor and environmental laws and customs enforcement of rules.

Regarding the former, Padilla said that, for opponents of trade, labor laws will never be good enough.

(Opponents) offer no strategy for improving conditions on the ground, he said. They offer nothing but rejections. Our strategy, however, is designed to improve the situation for workers on the ground: CAFTA requires as a core part of the trade agreement with Central Americans and Dominican Republicans a strict enforcement of their labor laws.

On February 21, the U.S. Department of State announced that the U.S., the five Central American countries and the Dominican Republic have signed two agreements designed to complement and facilitate the implementation of environmental provisions in DR-CAFTA.

The seven governments signed an understanding establishing a secretariat to administer a public submissions mechanism and an Environmental Cooperation Agreement (ECA) to guide long-term environmental cooperation in the region.

Related to customs, Spooner pointed out that the U.S. negotiated into the deal several special enforcement provisions for textile products, above and beyond those of other goods.

On the day of the Raleigh summit, a coalition of North Carolina labor and civil rights groups held a press conference expressing opposition to the free trade deal. The Carolina Interfaith Taskforce on Central America and the North Carolina AFL-CIO said the North America Free Trade Agreements 11-year impact on North Carolina communities and harm to Mexican farmers and workers should give pause to lawmakers considering its expansion to Central America.

North Carolina leads the nation in NAFTA-related job losses, Ray Riffe, secretary treasurer of the North Carolina AFL-CIO, said in a statement. Neither Mexican nor North Carolina workers and farmers benefited from this free trade fiasco; why should we believe that the same model applied to Central America will lead to different results?

The NAFTA/CAFTA comparison was broached on several occasions during the summits, but defenders of the deal say the comparison is apples to oranges.

Marshall L. Johnson (L), vice president at R.L. Stowe Mills Inc., Belmont, NC talks with H.E. Tomas Duenas, ambassador of Costa Rica to the United States, after the DR-CAFTA summit in Charlotte. About 150 people attended the event at Central Piedmont Community College.
Photos by Devin Steele

DR-CAFTA is quite different than NAFTA, said Mark Smith, managing director of Western Hemisphere Affairs for the U.S. Chamber of Commerce.

Although our experience caused quite a hangover from the NAFTA debate, this is a different one, a more nuanced one and the more people understand what the nature of this agreement is and what the current situation is, vis a vis these countries, the better people will see that this is really an opportunity for our business communities.

Unlike NAFTA, he added, the DR-CAFTA agreement is unique in that we have basically already paid an economic price to increase imports from these countries into our market. And in the area of textiles, imports are not necessarily indicative of the loss of jobs because our textile industries are so integrated.

The bottom line, Smith added, is that the Chinese are eating our lunch and theyre going to eat our lunch whether we have CAFTA or we dont have CAFTA. But the question is, how much lunch are they going to eat? This limits that allotment, that portion, and it gives our textile guys the opportunity to compete, to keep supplying the cotton, to keep spinning the yarn, to keep exporting fabrics.

Look at the percentage of content that comes from Asia via the percentage of content that comes from the DR-CAFTA region, he continued. From the DR-CAFTA region, if Im not mistaken, its 40 to 90 percent. U.S. value is in every single textile import that we receive from the region. If you look at China, I think its 1 to 3 percent.

Though DR-CAFTA does not solve all the U.S. textile industrys problems, it goes a long way in providing a tool for companies to compete, Smith added.

We cant change the world, he said. Weve eliminated the quota. Were going to have to compete with the Chinese. But the question is, what will we do for the future of this industry? This is an answer.

Peter Hegarty, president of Tuscarora Yarns and the American Textile Export Company (AMTEC), Gastonia, NC, also was invited to give his testimony about the importance of passing this agreement.

If we dont have a CAFTA, I dont know how our industry is going to survive, he said. CAFTA is not the epitome of what wed like to have. Its not perfect by any stretch of the imagination. But its certainly an agreement that we can all live by and we can all thrive by.

Peter Hegarty, president of Tuscarora Yarns and the American Textile Export Company (AMTEC), Gastonia, NC, participates in a panel discussion of the deal.

Hegarty noted that about 35 percent of Tuscarora goods are exported; of that, about 80 percent goes to the Caribbean Basin region, he added.

Ive already seen China go after my business in the Caribbean Basin, he said. Ive started doing a lot of business with Korean companies that are established there. China has targeted these companies and undercut my prices by 30 percent. There is not 30 percent margin in these prices. So these have to be government subsidized, currency subsidized. It is not a fair playing field where China is concerned.

Other speakers in Charlotte included Steve Robertson, president of Robertson Airtech, which supplies services and equipment to several industries, including textiles; Ron Watts, executive vice president of Robertson Airtechs Construction Division; and Ervin Portman, president of Weststar Precision, Inc., Holly Springs, NC.

China quotas

Feb. 28, 2005

U.S. appeals safeguard injunction

WASHINGTON, DC  The U.S. government on Feb. 14 filed an appeal with the U.S. Court of Appeals for the Federal Circuit here seeking to overturn the injunction on threat-based special textile China safeguard petitions issued by the U.S. Court of International Trade (CIT).

The appeal, long awaited by most of the U.S. textile industry, asked the court to remand the case to the CIT with instructions to dismiss the lawsuit filed in December by the U.S. Association of Importers of Textiles and Apparel (USA-ITA).

A week earlier, the U.S. government filed separate motions with the U.S. Court of Appeals to stay the injunction issued by the CIT and to approve an expedited calendar for consideration of the full appeal filed Feb. 14.

We hope that the U.S. Court of Appeals for the Federal Circuit will stay the injunction and rule on the underlying appeal as soon as possible. It is clear that the U.S. government has an extremely strong legal case in this matter, said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Tantillo added that it is critical that the court rule on the motion to stay the injunction and on the underlying appeal as quickly as possible.

Delay is deadly, he said. Every day that goes by without resolution to this case is another day for China to surge into the U.S. market and put U.S. textile and apparel manufacturing employees out of work.

Year-ending trade numbers released by the U.S. government on Feb. 10 shows that the United States ran a $73.1 billion trade deficit in textiles and apparel in 2004  8.7 percent larger than 2003s trade deficit of $67.2 billion.

U.S. imports of textiles and apparel totaled $89.25 billion in 2004. In comparison, 2004 U.S. exports of textiles and apparel totaled $16.15 billion.

Home textiles producer

Feb. 28, 2005

Dan River emerges from bankruptcy protection

DANVILLE, VA  Dan River on Feb. 14 announced that it has emerged from Chapter 11 bankruptcy protection.

The company concluded its fast-track reorganization after completing all required actions and satisfying all remaining conditions to its plan of reorganization, which was confirmed by the U. S. Bankruptcy Court for the Northern District of Georgia.

With the emergence, Barry Shea has assumed the role of president and chief executive officer and Joseph L. Lanier Jr. has become non-executive chairman of the board.

This is a great day for the new Dan River, Shea said. The last 10 and a half months have been very difficult but the reorganization process has allowed us to emerge from Chapter 11 with a greatly de-leveraged balance sheet and an improved expense structure that permits Dan River to be a leader in the competitive home fashions and apparel fabrics markets that we serve.

About $225 million in unsecured obligations will be converted into new equity in the reorganized company, he added.

The company emerges from Chapter 11 with a renewed vitality and an unwavering commitment to create value-added products that will draw the attention of consumers and will allow our customers to differentiate themselves in the competitive retail environment in which they participate, Shea said.

As part of the consummation of the plan, the previously outstanding shares of class A and class B common stock were canceled effective February 14.

The company will issue new common stock to certain of the companys post-emergence lenders and to its unsecured pre-petition creditors, including the holders of the companys Senior Notes due 2009, as the company completes the claims reconciliation process.

Upon emergence from Chapter 11, the company will have fewer than 300 holders of record of its new common stock.

In accordance with the rules and regulations of the Securities and Exchange Commision, Dan River said it expects to file a Form 15 to deregister its common stock and will cease to be a public reporting firm.

Machinery supplier

Feb. 28, 2005

Rieter buys all Suessen shares

WINTERTHUR, SWITZERLAND  Industry equipment supplier The Rieter Group on February 3 reported lower sales in its Textile Systems division and announced that it has exercised its option to acquire the remaining shares of Spindelfabrik Suessen GmbH.

Sales of Textile Systems totaled 1.176 billion CHF, down about 4 percent from the year before. Its Automotive Systems division more than compensated for the decline in the textile segment, the company said.

Rieter said it maintained the level of sales of staple fiber machinery, but the manmade fiber machinery business suffered from a downturn due to market-related factors.

Rieter noted a positive trend in carpet yarn machinery business, however. Also, the company has expanded its product range in the nonwovens machinery business.

In 2004 spunbond and meltblown installations were supplied in addition to the established spunlace process.

Rieter also is increasing its holding from 19 percent to 100 percent of Spindelfabrik Suessen GmbH, based in Süssen, Germany. These activities will be consolidated into group accounts, the company said.

Suessen is primarily engaged in the development and manufacturing of technology components for ring and rotor spinning machines, which it supplies to all major machine manufacturers and directly to spinning mills. Consolidated sales in 2004 were some 70 million CHF.

Suessen employs a work force of some 250 employees in Germany and 350 employees at a production plant in India. With the integration of the Indian plant, Rieter said it will reinforce its position in the Asian markets.

Dornier celebrates 55,000th delivery

The delivery was celebrated during a ceremony at Hohmann, which also used the occasion to inaugurate its new production facility, install its 300th Dornier weaving machine and commemorate its 30-year partnership with Dornier.

The new facility provides Hohmann with space for 144 new weaving machines and a new high-performance tenter frame. The facility was built in just seven months.

During the ceremony, Hohmann Managing Director Martin Buchta and guests of honor, including Dornier Manager Peter Dornier, rolled the 300th Dornier weaving machine, decorated with flowers, into the weave room.

Hohmann GmbH & Co. currently weaves 40,000 meters of curtain and drapery fabrics daily, using only Dornier weaving machines. The weaving mill  with 330 rapier weaving machines installed with 8 filling colors in dobby, leno and Jacquard design of nominal widths of 280 and 330 cm  is the largest Dornier customer in Germany.

The follow-up order for 32 new type PTS rapier weaving machines underscores the 30-year HohmannDornier cooperation, the companies said.

Fiber glass processor

Feb. 28, 2005

AGV Products further automates system

CHARLOTTE, NC  AGV Products, Inc., based here, announced that its fiber glass yarn processing system is now fully automated with the implementation of robotic systems and AGVs (Automated Guided Vehicles).

Our goal is to push the winding process  once the ovens start melting the glass, we must constantly pull the strands through the winders, said an AGV spokesperson. This is a daunting task when you consider the number ovens and yarn types all running continuously.

Inventory, traffic control and operational status of our fiber glass yarn processing system is now fully automated with the implementation of ... AGVs.

The AGV control system is designed to shake hands with robots that load and unload processing equipment. Once the control system is given the order, it will signal the AGVs to move product from step to step. AGVs facility has attained maximum efficiency; operators simply set basic parameters and the control systems take over, the company said.

Bernd Brockmueller, manager of Automation and Machine Design for PPG Industries, Inc.s Fiber Glass Division, discussed the implementation of an AGV system and control software at the PPG Manufacturing Center in Chester, SC.

The AGV system interfaces with the robotic handling machines.

Since integrating the automated systems in 1997, we continually set new production goals, efficiently running 24 hours a day, 7 days a week, 365 days a year, Brockmueller said.

PPGs Chester plant opened in 1996 and is dedicated to the production of fiber glass rovings. The plant uses robotics and sophisticated automation in production of PPG glass products.

The AGV system was a major addition to our processing operations and helps us meet our customer service goals, Brockmueller said.

The task of the AGV system is to pull the product through the processing stages, Brockmueller explained.

Once the ovens start melting glass, we must keep the products moving through the various processing stages, he said. The high-speed winders are the critical point, so we make sure empty trucks are always available to pull the product spools through the system. We have eight AGVs that handle the job.

For the most part, this system is an operator-driven system, meaning that operators request the system to do something for them.

We have specially designed transport trucks that each carry the fiber glass packages, Brockmueller said. The system controller will call the AGV to pick up the truck as soon as it is fully loaded. The AGV has outrigger forks that fit under the hand trucks and lift them slightly off the ground for transporting to the conditioning/drying area.

Briefs

Feb. 28, 2005

ASTM Intl honors NC State professor

W. CONSHOHOCKEN, PA  Behnam Pourdeyhimi, Ph.D. has been honored with the 2004 ASTM International Harold DeWitt Smith Memorial Award in the field of textile and fiber materials science and engineering.

Pourdeyhimi is the Klopman Distinguished Professor of Textile Materials, associate dean for Industry Research and Extension and director of the Nonwovens Cooperative Research Center at the College of Textiles, NC State University.

ASTM International Committee D13 on Textiles cited Pourdeyhimi for significant contributions to education, research and the nonwovens industry; for characterization, instrumentation, measurement, and analysis of nonwoven and other fibrous structures, and for successful and innovative management and leadership of a university-industry nonwovens consortium at NC State.

Pourdeyhimi has published more than 100 papers in refereed journals, given more than 100 conference presentations, delivered dozens of workshop presentations and developed a number of analysis software packages.

Stan Herman to judge Stretch competition

FALL RIVER, MA  RadiciSpandex Corporation announced that three-time Coty Award-winning designer Stan Herman will serve as the Designer Judge and Honoree for the 2005 edition of the Stretch to the Future design scholarship competition.

For the first time, the event will take place at the Pratt Institute college of art and design in New York City on May 2.

Created in 1999, the scholarship competition fosters the creative development of design students while educating them about the technical aspects of garment construction using fashion fabrics containing a highly technical fiber such as elastane, which RadiciSpandex Corp. manufactures.

Herman will lead a judging panel that will determine the winners of three scholarships from RadiciSpandex Corp.

Trident offers free product trial kit

BROOKFIELD, CT Trident announced the availability of a free product trial and evaluation kit for FabricFastT ink.

FabricFast is a pigmented, water-based ink with binder that enables customers to achieve a color gamut that matches the colors that will ultimately be used in print production. This makes FabricFast ideal for short run printing, sampling and proofing of textiles, home textiles, interior textiles, signs, banners, flags, tags and labels, the company said.

Printhouses, mills, studios, service bureaus, distributors and designers worldwide can order a free FabricFast Sample Test Kit by writing sliker@trident-itw.com or by faxing 203-775-9660. Quantities are limited and available on a first-come, first-served basis.

AATCC technical manual available

RESEARCH TRIANGLE PARK, NC  The 2005 American Association of Textile Chemists & Colorists Technical Manual is now available in both print and CD-ROM format.

The CD-ROM in searchable PDF format contains the same 115 test methods and eight evaluation procedures as the printed version.

To order, specify order No. 3005CD and call 919-549-3526 or send e-mail to orders@aatcc.org.

Honeywell to up price for nylon textiles

CHARLOTTE, NC  Honeywell announced a price increase of 5 percent to 10 percent over the current price of all nylon textile products from Honeywell Nylon LLC, effective March 14.

Ticona increases price of polyester products

FLORENCE, KY  Ticona, the technical polymers business of Celanese Corp., said it is increasing the price of its polyester products.

Educational institution

Feb. 28, 2005

ITT welcomes new members

RALEIGH, NC  The Institute of Textile Technology (ITT) has added three members to its ranks: Parkdale Mills, R. L. Stowe Mills and the International Textile Group.

The membership of these new members demonstrates confidence in ITTs goals to support the textile industry by providing new knowledge and product development through applied research, analytical expertise and diagnostic capability, ongoing training and graduate education for future leaders, according to ITT.

The ITT/NC State Textile & Material Research Consortium has been created to enhance the ability of industry to access and utilize the research and technical resources of ITT and NC State. Integration and utilization of these resources is critical for the development and perpetuation of innovation and product development required for differentiation of companies in a competitive global economy, the institute noted.

Additionally, ITT and NC State are also poised to provide technical support to the industry to reduce manufacturing costs, improve productivity, improve manufacturing efficiency, reduce waste and better manage the integrated product supply chain.

ITT has rescheduled its Alumni Event, which was postponed due to inclement weather, to June 11.

The event will take place at the Marriott Charlotte City Center in Charlotte.

Since 1949, ITT has graduated more than 50 leaders in the U.S. textile industry. Classmates and other ITT graduates are invited to attend and reminisce about their days in Charlottesville, VA, as the institute begins a new era at NC State University here.

Cost is $50 per person and will include an Alumni Association meeting, a reception, dinner and dancing.

The Marriott has reserved a block of rooms at a group rate of $79 for single or double occupancy. Hotel reservations may be directly with the Marriott by calling 1-800-228-9290 or 704-333-9000. Please refer to the ITT Alumni Association Event.

For more information, contact Patrice Hill, administrative manager, by e-mail at patriceh@itt.edu or by phone at 919-513-7583.

Conferences slated

Textile experts from across the country and around the world will gather at NC State Universitys College of Textiles here and the Sheraton Imperial Hotel at Research Triangle Park, NC, in March for back-to-back textile conferences.

The 13th National Textile Center Forum and the 84th Textile Institute Annual World Conferences will take place March 20-25. The conferences are presented by The Textile Institute, the National Textile Center and the NC State College of Textiles.

The National Textile Center features the results of cutting-edge research by faculty and students of the NC State College of Textiles, as well as those of the seven other university members of the National Textile Center.

The program for the Textile Institute Annual World Conference will feature nearly 200 presentations at the forefront of international research in the areas of industrial textiles, supply chain management, greige processing, textile education, wet processing, nanotechnology, trade, design, modeling, healthcare, fashion and commerce.

Also, the conference will feature four internationally known plenary speakers, including Dr. Victoria Haynes, president and CEO, Research Triangle Institute (Research in a Global Environment); Dr. Kenneth Wang, CEO of Sterling (Operative Innovation); Robert A. Miller, vice president of research at Sara Lee Branded Products (Innovation: How We Survive); and K. M. Schuman of Procter & Gamble (Global Marketing).

The Textile Institute Annual World Conference is sponsored by five of the American textile research and development institutions, including the American Association of Textile Chemists and Colorists, Cotton Incorporated, the Association of the Nonwoven Fabric Industry (INDA), The Institute of Textile Technology and (TC)2.

Scholarship endowment

Feb. 28, 2005

Cranston pledges to URI students

KINGSTON, RI  The oldest textile printing company in the nation, Cranston Print Works, has made a significant New Years resolution that will affect University of Rhode Island students for years to come.

Last month, the Cranston Print Works Foundation pledged $25,000 to establish an endowed scholarship fund for students enrolled in the Universitys Textiles, Fashion Merchandising and Design (TMD) department.

We are very grateful to the Cranston Print Works Foundation for its leadership and support of our students, said Robert M. Beagle, vice president of the Division of University Advancement. This new endowment will have a lasting impact on students training to enter the textiles field and on the university as a whole. Textiles is one of our top programs.

The gift is a part of the universitys upcoming capital campaign, which is in its early phase and will focus predominately on contributions to build the universitys endowment.

Income from the Cranston Print Works Scholarship will be awarded as a scholarship to a student majoring in fashion merchandising, apparel studies, textile science or interior furnishings and design. Currently, there are just two scholarships designated exclusively for TMD students.

I believe that URI has a terrific department and we are very pleased to support their work, said Cranston CEO George Shuster.

Mill Notes

Feb. 28, 2005

Hoffman Mills closes doors

The company was the victim of pressures of from low-cost imports, primarily from Asia, it said.

The Chinese fabric market has devastated the fabric industry throughout the United States, the company said in a December statement to employees. The business of HMI has been declining over the past several years. The owners and employees of the company have done everything within their power to preserve the business. Despite all of our efforts, the situation appears dire and hopeless. The legs of the business have been pulled right out from under us.

The company was founded in Rhode Island in 1926 and relocated here in 1938.

Santee Print Works lays off 55 people

SUMTER, SC  Santee Print Works, based here, has laid off 55 employees due to increasing import pressures and a weak economy.

Santee Print, founded in 1949, is a printer, finisher and dyer of fine fabrics. About a year ago, the company reported employment numbers of about 1,000 people at its 1.5 million-square-foot facility.

Santee remains a strong, viable business, even in these difficult economic times, company President Martin Barocas said in a news release. Foreign imports, primarily from China, a weak economy and a decrease in demand for our products since Sept. 11 have had an impact on our business.

China is a major exporter (that) has taken advantage of unfair trade practices, such as currency manipulation, export tax rebates, non-performing loans and other subsidies, so it can gain a monopoly share of global trade in the textile and apparel market, Barocas added. The U.S. government has stood by without any concern for or action against these unfair practices. Other countries, however, have taken appropriate action to prevent China from impacting their textile industry.

The company laid off of about 25 people about a year ago.

Unfortunately, it has been necessary on several occasions during the last couple of years to reduce our work force because of this situation, Barocas said. We are hopeful that the most recent layoffs will be the last needed and there are certainly no more planned at this point in time. Some have predicted a general improvement in business conditions and the economy this year. We hope these predictions prove true.

Wellman suffers loss, despite record sales

SHREWSBURY, NJ  Wellman, Inc. took a loss in the fourth quarter and full year, but reported record sales of $372.2 million and $1.3 billion for the year.

The net loss attributable to common stockholders for the quarter was $4.7 million, or 15 cents per diluted share, compared to a net loss of $105.2 million, or $3.33 per diluted share, for the same quarter last year.

For the year, Wellman reported a net loss of $51.1 million, or $1.61 per diluted share, compared to a net loss of $106.7 million, or $3.38 per diluted share for 2003.

Wellman is pleased to report record sales, said Tom Duff, Wellmans Chairman and CEO.

Mohawk Industries sees earnings rise

Earnings were up slightly from $102.1 million, or $1.51 per share, for the same period last year. Sales increased 8 percent.

This increase was primarily the result of strong internal growth of both Mohawk and Dal-Tile products and the Lees Carpet acquisition, the company said.

For the year, Mohawk reported earnings of $368.6 million, or $5.46 per share. For the same period last year, profits were $310.1 million, or $4.62 per share. Sales increased 18 percent to $5.88 billion, from $5 billion.

Textile recycler

Feb. 28, 2005

Bollag acquires two divisions

CHARLOTTE, NC  Bollag International, a textile recycler based here, has acquired the wiping cloth division of Leggett and Platt of Villa Rica, GA, and the Intex DIY division of the Tranzonic Companies of Cleveland.

Both acquisitions will be operated as Intex, A Bollag International Company.

A transition team of senior sales and operations managers of the two acquisitions and Bollag corporate will lead the integration and consolidation of the merged companies, Bollag said. Robert Dailey III, executive vice president and general manager of Intex DIY, has been named the president and chief operating officer of the new Bollag division, which will be headquartered at the Villa Rica site.

Steiner Wiping Cloth as the wiping cloth division of Leggett and Platt was once known, was started in Nashville, TN, in 1920 and was purchased by Leggett & Platt, Inc. in 1985. The business was expanded to Villa Rica, GA, in 1992.

Since that time it has become a leading supplier of top-quality wiping cloth products to the retail paint, hardware and industrial distribution markets in the U.S.

Intex DIY is a collection of acquisitions made by The Tranzonic Companies over the past 10 years, including Darra, Bloch New England and others. Today Intex DIY is a market leader in supplying car and boat care accessories, paint sundries and cleaning accessory products to major retail customers in the home center, paint, hardware, automotive and general merchandiser segments.

Bollag International handles more than 125 million pounds per year of textile fibers, textile wastes, cutting waste, yarns, cuttings and wiping cloths.

We are extremely excited to bring together two companies that have demonstrated excellence and market leadership in innovation, quality products and customer service in their respective channels, said Mitch Bollag, CEO of Bollag International. These acquisitions offer strategic and unique growth opportunities as we align them with the category experience and network of wiping cloth sources of Bollag International both in the United States and abroad.

On the Move

Feb. 28, 2005

Cotton Inc. welcomes O'Regan in nonwovens

NEW YORK  Janet ORegan has joined Cotton Incorporateds Global Product Marketing team as manager, Nonwovens Product Marketing.

She will report to Dean Turner, senior vice president of Global Product Marketing.

ORegans responsibilities will include assessing the opportunity for cotton in nonwovens markets, and then directing Cotton Incorporateds efforts to attain significant manufacturer adoptions.

ORegan has an extensive background in the nonwovens industry. She previously worked for Allasso Industries, where she was director of Sales and Marketing. In addition, she spent 20 years in various positions with Freudenberg Nonwovens.

ORegan has a B.S. degree in textiles and business from Penn State, and an M.B.A. in marketing from the Stern Graduate School of Business, New York University, graduating summa cum laude and cum laude, respectively.

Schaeffer elected director at PGI

NORTH CHARLESTON, SC  James L. Schaeffer, chief executive officer of Polymer Group, Inc. (PGI), has been appointed to the companys board of directors.

Schaeffers appointment increases the boards size to eight members. The companys stockholders agreement and by-laws were amended to allow the board to increase its size and to fill certain newly created or existing vacancies under certain circumstances.

Schaeffer, 54, has been CEO of the company since March 2003. During this period, PGI has made steady improvement in sales and profitability.

Prior to becoming CEO, Schaeffer served as executive vice president of the corporation, and president and chief operating officer of PGIs nonwovens division.

Obituary

Feb. 28, 2005

McCommon was Atlantic chairman

MACON, GA  Robert Lee McCommon Jr., chairman of the board of Atlantic Cotton Mills, Inc., and president of Georgianna Products, Inc., died Feb. 15, 2005. He was 80.

McCommon also was a past member and director of the Georgia Textile Education Foundation.

He attended Georgia Tech and graduated from Mercer University. He was a veteran of the U.S. Army, serving in Europe during World War II (1944-45). He was an infantryman in the 8th Armored Division and fought in the Battle of the Bulge. He maintained his private pilots license for more than 40 years.

McCommon was a member and past vestryman of St. Pauls Episcopal Church. He was a member of the Idle Hour Country Club, the Union League Club of New York and the Union League of Chicago.

Also, he was a past member of the Salvation Army Advisory Board, director of the United Fund, board member of Georgia Industrial Home and a charter member of the Macon Civic Club. He is a past member of the Young Presidents Organization and a member of the Boy Scout Advisory Board.

Survivors include his wife of 56 years, Frances Lee Callaway McCommon; children, Robert Lee McCommon III and wife Sarah of Macon, Claire M. Smith and husband G. Boone Smith III of Macon, Ginny M. McKay and husband Dr. Dick McKay, of Raleigh, NC, and Dr. George W. McCommon and wife Disa of Macon; and six grandchildren.

Resin maker

Feb. 28, 2005

Company now NatureWorks

MINNETONKA, MN  The company that makes the proprietary, corn-based plastic resins marketed under the NatureWorks® PLA and Ingeo fiber brand names is now known as NatureWorks LLC.

The name change follows Cargills decision to acquire The Dow Chemical Co.s interest in Cargill Dow LLC, a 50:50 joint venture formed in 1997 to commercialize polylactic acid biopolymers. The newly named firm will function as a stand-alone entity owned by Cargill.

Pickin' Cotton

Feb. 28, 2005

China consumption seen boosting global demand

By Odyll Santos

Spring planting time is coming up for various cotton areas in the U.S., and cotton industry observers are already making their predictions for the following season. At the Ag Marketing Networks conference in Memphis the week of February 14, robust world demand for cotton was a theme that was often cited. With Chinas textile industry continuing to consume cotton at a rate above many estimates, expectations are high in 2005-06 that global cotton demand will exceed current estimates.

Some estimates of Chinese consumption are as high as 40 million bales, or 2.5 million more than the February USDA estimate, noted cotton marketing specialist O.A. Cleveland of Mississippi in written comments for the week. USDA estimated Chinese consumption at 37.5 million bales in February.

In addition, speakers at the conference generally agreed that 2005 U.S. acreage would expand, while Chinese and world acreage would decline. This scenario, thus, sets the stage for higher prices for the 2005-06 marketing season, Cleveland said.Speaking during an Ag Marketing Network conference call, Joe Nicosia, chief executive of Allenberg Cotton Co. in Cordova, TN, said he expects China to continue importing a substantial amount of cotton to supply its textile mills.

A shortage of land for growing cotton for domestic consumption would force China to continue its large-scale imports, he said. Nicosia noted that Chinese cotton use was 23 million bales in 2000 and will rise to 38 million to 39 million bales in 2004-05. However, imports by China dropped in the current season. As the Chinese government clamped down on credit, imports have been slightly reduced because prices dropped internally, he said.

In 2005-06, Nicosia said he expects Chinese consumption at an estimated 41 million to 44 million bales, while the countrys imports are expected to soar. He sees a 17 million- to 18 million-bale deficit in China for the 2005-06 season that will be made up through imports and a drawdown of the countrys cotton stocks. In February, USDA estimated Chinese production at 29 million bales and ending stocks at 8.19 million bales.

Demand in China in the next several months will be key to the performance of the world cotton market. China will need to buy 200,000 bales a week from the rest of the world to cover demand to meet its production schedule, Nicosia said.

Large purchases by China would help boost cotton prices, though any major gains in price are not likely to occur at the beginning of 2005-06. The season will start off with large stocks carried over from 2004-05, which likely would prevent price rallies.

Cotton yields around the world also will be closely watched. The principal point that was made over and over was that the level of world yield would be considerably more important in 2005 than in most years, Cleveland said. The improved array of cottonseed varieties, producing higher yields as well as more premium fiber qualities, appears to have raised the yield plateau in the U.S.

High yields in the U.S., approaching the 2004-05 levels, could pressure prices. Increased yields in other cotton-growing countries, which experienced better-than-normal temperatures for cotton production in 2004, also could add to the burden.However, there is uncertainty over yields in China. Cotton plantings in China already are expected to decline in the next season due to lower prices. Nicosia said that in 2005, Chinese farmers are likely to plant 10 percent to 12 percent fewer acres.

With smaller plantings, a decline in Chinese yields eventually could end up boosting cotton prices worldwide. In its February report, USDA estimated world 2004-05 production at 116.7 million bales, with consumption at 105.8 million and ending stocks at 46.7 million.

Guest Editorial

February 28, 2005

DR-CAFTA: A vote for freedom, democracy, reform

By Chris Padilla

Editors note: Following are excerpts from a speech given by Christopher Padilla, assistant U.S. Trade Representative for Intergovernmental Affairs and Public Liaison, during the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) summit in Charlotte on Feb. 17.

IF YOURE CONCERNED about Americas trade deficit, then CAFTA is the agreement for you. Today, nearly 80 percent of everything we import from Central America comes into this country duty-free, and its been that way for a decade. The average industrial tariff on Central American imports coming into the United States is close to zero, whereas the average tariff on industrial goods into Central America applied on our products is between 7 percent and 9 percent. In agriculture the discrepancy is even wider. ...

This is because Congress approved, with broad bipartisan support, programs to unilaterally open U.S. markets to imports from Central America over the last decade. Today trade with this region is a one-way street  its one way coming in. What CAFTA does is open their markets to our products. If you want a level playing field, if you are concerned about the trade deficit and you want to open foreign markets to the same extent that our market is open, then CAFTA is a good trade agreement for you.

That is also true in textiles. We believe this agreement is very good for Americas textile industry. Thats why were here today in North Carolina. This agreement has been carefully negotiated to continue the sales of U.S. fabrics and yarn into what is the second largest export market for this industry. Its also true that if we do not pass this agreement, the competitive threat from China means that apparel customers in Central America will pack up and move to China and take their order books with them. We believe this is good for textiles. We do not believe this agreement has loopholes. There will be no renegotiation of this agreement. With every passing day, this states largest export customers are thinking about fleeing. That is not in the interest of this industry. CAFTA is a way for us to unite our industries in this hemisphere better to compete with China and we need to pass it soon before its too late.

NOW, LETS TALK about labor. For the opponents of trade, the labor laws will never be good enough. They offer no strategy for improving conditions on the ground. They offer nothing but rejections. Our strategy, however, is designed to improve the situation for workers on the ground, in several ways. First, that CAFTA requires as a core part of the trade agreement with Central Americans and Dominican Republicans, to strictly enforce their labor laws. Those laws are pretty good, but we need better enforcement and this agreement requires better enforcement. ...

The second key thing weve done is to work with Central America and the Dominican Republic to take concrete, meaningful steps to improve labor law enforcement in the last two years. And they have done a lot. Theyve hired more labor inspectors. Theyve reduced the backlog in their labor courts. Theyve hired special prosecutors. Theyve rewritten their labor codes top to bottom. Theyve ended violence against trade unions. Now theyve done a lot, but I think the ambassadors would acknowledge that they need to do more. And they are taking this obligation seriously.

One problem for these countries is a question of resources. In one country that we know of, they have plenty of labor inspectors. The problem is, they dont have any trucks. So they cant get out to visit the sites where some of these plants are located. We can remedy that with capacity building assistance. And Congress has appropriated $20 million in the fiscal 2005 Economic Appropriations Bill for an operations appropriation specifically targeted for improving labor enforcement in Central America.

So those are the keys  require tougher enforcement of labor laws, work with them to produce meaningful, concrete improvements and help give them the resources to make those improvements. That is a strategy that will produce real results. ...

NOW, THE LAST argument for CAFTA, I think is perhaps the most compelling. For a about 15 years while I was growing up, we never traveled to Guatemala to visit my family because my father feared it was too dangerous. Guatemala, like most of the countries of the region, was enmeshed in a violent civil war. There were communist insurgencies, there were battles over whether or not these countries would become democracies. Twenty years ago if you picked up a U.S. newspaper and read about Central America, you read about Contras in Nicaragua, or the debate in our Congress about whether to fund them. You read about communist insurgency in El Salvador. You read about civil wars ...

Today, we have democracies in all of those countries. In the last 20 years, Central America has made remarkable progress toward improvement. Today, the region has fragile democracies that need U.S. support. Elected leaders in this region are embracing freedom and economic reform. They are fighting corruption. They are strengthening the rule of law involving crime and they are supporting America in the war on terrorism.

But the anti-reform forces in those regions have not gone away. The Sandanistas are still in Nicaragua as a strong political force. And they oppose CAFTA. The FMLN is still in El Salvador. Theyve laid down their arms, but they oppose CAFTA, too.

CAFTA is a way that America can support freedom, democracy and reform in our own neighborhood. If the president believes nothing else, he believes that America should stand with those in our hemisphere who stand for economic freedom. Thats why I believe CAFTA will pass the Congress  because I do not believe that America will turn its back on democracies that are struggling to solidify democracy, reduce poverty and give their citizens a better way of life.

So once again, as we have had in this country many times over the past decades, we will engage in the great debate on trade. The question we face in this debate is similar to the questions we have faced in past debates. Will the United States remain economically engaged with the world? Will we work to advance economic freedom and against poverty while supporting jobs at home and creating new opportunities for our companys workers? Or will we retreat into economic isolationism and rejectionism and offering no strategy for reform other than naysaying?

All of you will play in important part of this debate. The fact that youre here today is a very good first step. The opponents of trade are very vocal. They always are, while the proponents of trade generally tend to be quiet. It is absolutely important that you allow your voices to be heard. Thats what democracy is about. I believe a majority of Congress will support CAFTA when it comes to a vote. I believe a majority of the textile industry will support CAFTA because I believe that when we get the message out, and we talk about the pros and cons, I believe the argument for passage is overwhelming.